The Motiva Enterprises refinery in Port Arthur will be a challenge for Shell's Ben van Beurden. Parts of the plant shut down for several months following a fire.

The Motiva Enterprises refinery in Port Arthur will be a challenge for Shell's Ben van Beurden. Parts of the plant shut down for several months following a fire.

Photo: Guiseppe Barranco, STAFF PHOTOGRAPHER

Shell's CEO move points to ongoing downstream plans

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Royal Dutch Shell has selected its refining leader, Ben van Beurden, as its next CEO, signaling plans to leverage chemical and refining expertise and suggesting it won't imitate rivals that have spun off downstream operations.

Van Beurden will take the top job early in 2014, succeeding Peter Voser, who announced his retirement in May.

"Ben brings great experience to the role," Marvin Odum, president of Shell Oil Co., Royal Dutch Shell's Houston-based North American operation, said in an interview with the Chronicle. "He has worked across a number of businesses, he understands the businesses well, and he brings deep, deep experience in the downstream side of our business."

Van Beurden, 54, has been downstream director since January. In 2005, he worked in Houston overseeing Shell's high-performance initiatives in refining and chemicals manufacturing.

Odum said that van Beurden's chemical and refining background could bode well for petrochemical plants and refineries.

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"We're having a deep look at chemical opportunities in North America, like the investigation we are doing in Pennsylvania, and Ben's a supporter of that program," Odum said, citing a potential plastic feedstock plant investment.

Van Beurden, a Dutch national, joined Shell in 1983 and has held a number of technical and commercial roles in upstream and downstream businesses. He has a master's degree in chemical engineering from Delft University of Technology in the Netherlands.

Speculation about Voser's potential successors had included Odum and Simon Henry, Royal Dutch Shell's chief financial officer, but not van Beurden, said Stephen Simko, an analyst for investment research firm Morningstar in Chicago.

Van Beurden will take the reins as the company strives for ambitious production targets: 4 million barrels a day of output by 2017, up from 3.6 million in the first quarter of 2013.

And Shell investors are watching closely whether the company's capital spending will turn into the promised revenue streams. The company plans to spend more than $30 billion a year in capital projects.

Struggling with regulatory demands and heated protest from environmentalists, Shell conducted preliminary drilling last summer in Alaska's Chukchi and Beaufort seas. It canceled plans to return in 2013, however, after setbacks including the grounding of one of its rigs while it was in transit late last year.

Henry, the chief financial officer, said in May that Shell hopes to return to the Arctic in 2014, but analysts say it will be an uphill battle to retain investor confidence.

"Alaska is not a pretty picture," said Fadel Gheit, an analyst with Oppenheimer. "They spent $3 billion and have nothing to show for it."

Gheit likewise predicts that the Motiva Enterprises refinery in Port Arthur, which Shell co-owns with Saudi Aramco, will be another headache for van Beurden. Parts of the Motiva plant, the nation's largest refinery since a $10 billion expansion completed last year, shut down for several months following a fire traced to internal weld cracks.

But van Beurden's larger challenge will be convincing investors that integrated companies like Shell still make for attractive investments in an era when some such companies - notably ConocoPhillips and Marathon Oil Corp. - have spun off downstream operations.